Page 2 - Fiscal Consolidation

No adverse policy changes in the interim budget was a boon: Rahul Arora

The focus on fiscal consolidation led by moderation in government capex aims to reduce the risk of the government crowding out the private sector

Strong emphasis on fiscal consolidation and public investment: Sujan Hajra

Given the robust tax buoyancy seen in recent years and the govt's modest expenditure plans, it is conceivable that the actual fiscal outcomes next year may surpass the budget's projections

Will interim Budget 2024 revive demand and investment?

The interim Budget 2024-25 on February 1 will likely see the central government boost investment, while still sticking to the fiscal consolidation path

Strength of next govt's mandate to influence fiscal consolidation: Moody's

Moody's Investors Service on Monday said the strength of the next government's mandate following parliamentary elections this year will influence the medium-term trajectory for fiscal consolidation and governance in India. It said a moderation in economic conditions in the US and the persistence of subdued growth in the euro area in 2024 will further dampen demand for goods produced in Asia Pacific and curb global commodity prices, but large emerging markets like India will be able to mitigate the impact. Moody's in its 2024 outlook for APAC sovereigns said that the forthcoming elections, particularly those with greater likelihood of leadership transitions, including Indonesia, pose a degree of policy uncertainty as governments seek to manage key geopolitical relationships, especially regarding China and the US, current economic and fiscal strains, and longer-term commitments toward addressing climate change. The prevalence of social risks amid political transition could undermine .

Centre may peg FY25 fiscal deficit at 5.3% in interim budget: Goldman Sachs

Interim Budget 2024: The Centre will keep a focus on increasing the capital expenditure but it will most likely be at a slower pace than earlier, says Goldman Sachs

RBI governor Shaktikanta Das asks states to improve expenditure quality

At a disaggregated level, a few large states have debt-to GSDP ratios exceeding 35 per cent, the report added

India's rating upgrade hinges on sustainable fiscal consolidation: S&P

MUMBAI (Reuters) - S&P Global Ratings could consider an upgrade in India's sovereign rating if the country's fiscal metrics improve on a sustained basis and inflation is persistently lower, aided by monetary policy actions, an analyst at the agency said on Wednesday.

Long road to fiscal consolidation

Even though India needs large infrastructure investments, the government should have prioritised fiscal consolidation

Bond yield hits 6-week low as Budget sticks to path of fiscal consolidation

Govt move to tax high-value insurance policies may hit demand for long-term bonds: Analysts

Budget's fiscal consolidation roadmap to stabilise debt burden: Moody's

Debt overhang offsets country's growth potential, says rating agency

Budget 2023: Tax sops, fiscal consolidation tight rope walk for Sitharaman

Finance Minister Nirmala Sitharaman will have to do a tight-rope walk between staying fiscally prudent and general public expectations of lower taxes and a wider social security net, while at the same time firing the engines of the economy before general elections. Sitharaman will on Wednesday present her fifth straight budget at a time when the economy is slowing due to global headwinds and specific sectors need attention. In the run-up to the Budget presentation, expectations are rife that she may tweak income-tax slabs to provide relief to the middle class and increase spending on the poor through programmes such as the rural job scheme while ramping up financial incentives for local manufacturing. But all this she has to do while staying on the course of the fiscal consolidation path. To her aid are inflation falling below the target and buoyancy in tax collections. Healthcare, education and the rural economy may get a first call on such revenues as well as sectors that create

Fiscal focus

Govt must aim for faster consolidation

MPC member Ashima Goyal says no time for aggressive fiscal consolidation

The government should not go in for an 'aggressive fiscal consolidation' in the upcoming budget as global risks have not abated, RBI Monetary Policy Committee (MPC) Member Ashima Goyal said on Wednesday. Goyal further said subsidies are expected to come down as food and energy inflation moderates. WPI inflation in food articles in November was 1.07 per cent against 8.33 per cent in the previous month. In the 'fuel and power' basket, inflation was 17.35 per cent last month. "Given fears of a global slowdown, this is not the time for aggressive consolidation. Sticking to small pre-announced steps on the path will minimise growth sacrifice, while moderating demand and the current account deficit, thus lowering the risk premium that keeps spreads high and raises the cost of government and private borrowing," she told PTI. India's fiscal deficit, the gap between expenditure and revenue, is projected to come down to 6.4 per cent in current fiscal ending March 2023, from 6.71 per cent in .

IMF calls for 'more ambitious' fiscal consolidation by India, cites risks

But govt asserts public debt is sustainable

India's fiscal consolidation trend intact; to see strong revenues: Moody's

Moody's Investors Service on Tuesday said the trend of gradual fiscal consolidation remains intact for India and going forward the country will see strong revenue performance and debt stablisation. Moody's Investors Service Senior Vice President Christian de Guzman said India's 'Baa3' sovereign rating balances its strength of relatively high economic growth and weakness of one of the most highly indebted emerging market sovereigns. The country's healthy financial system is reflected in deleveraging by Indian corporates. "We expect that India is going to be the fastest growing G-20 economy next year... (but) high inflation pose a downside risk to India's growth as households and businesses have less purchasing power," Guzman said in a Moody's virtual event 'Sovereign Deep Dive'. Moody's had earlier this month cut India's growth projection for 2022 to 7 per cent, from 7.7 per cent projected earlier. It expects growth to decelerate to 4.8 per cent in 2023 and then to rise to around 6.4

Fiscal consolidation today

Mercifully, India has been spared the problems that foreign currency sovereign debt would have posed

Best of BS Opinion: Labour market distress, fiscal consolidation and more

Here is the best of Business Standard's opinion pieces for Wednesday

Fiscal consolidation: States lack the flexibility that the Centre enjoys

While the Centre has an escape clause to deviate from the fiscal consolidation road map by 0.5 percentage point of GDP in times of exigency, states were not given any such escape clause

2-6% inflation target works well, no need to tinker with it: Sanjeev Sanyal

In a Q&A, the finance ministry's Principal Economic Advisor also explains why he thinks the latest Budget is extraordinary

Govt may have to apply brakes on existing fiscal consolidation road map

Centre may have to amend FRBM Act once again to achieve this, which isn't an issue as such an amendment does not require a two-third or three-fourth majority